Short-Term TSLA Price Movements - 2016

[tinm]

i would not rule out the possibility that TM partners with....God forbid...an ICE manufacturer to service a more mass market midel3. They will not be able to build SCs fast enough to service hundreds of thousands of 3s by 2020.

I've long suspected that Tesla will cave in the next 18-24 months and announce some sort of hybrid dealer franchise network to roll out the Model 3. But then Tesla General Counsel'shttp://www.teslamotorsclub.com/show...e-Laws/page6?p=1336946&viewfull=1#post1336946 recent remarks at the FTC were pretty categorically clear that they won't. Still, I would not be surprised, not at all.

 

[roblab]

i would not rule out the possibility that TM partners with....God forbid...an ICE manufacturer to service a more mass market midel3. They will not be able to build SCs fast enough to service hundreds of thousands of 3s by 2020.

Oh, please, I hope not. We have a Tesla Service Center near me that I refuse to use after the horrible service experience I had there. During one memorable moment, I had three service personnel telling me that they understood the service business because they had all worked at BMW. I drive 115 miles now in the other direction, where they at least do not make such claims, even if they might be true. That's not something you want to brag about.

 

[NJ Plugin]

I've long suspected that Tesla will cave in the next 18-24 months and announce some sort of hybrid dealer franchise network to roll out the Model 3. But then Tesla General Counsel's recent remarks at the FTC were pretty categorically clear that they won't. Still, I would not be surprised, not at all.

What about partnering with Costco? Not only do they have a large retail footprint, sell auto's now, and have (limited) auto garages. Not sure if their tire garages could be used or adapted for Tesla service.

From Wikipedia

As of 11 November 2015, Costco has a total of 674 warehouses, spread throughout the United States (474), Canada (89), United Kingdom (26), Australia (8), Mexico (34), Taiwan (10), South Korea (12), Japan (20), and Spain (2).

As of September 2015, Costco is the second largest auto seller in the US, just behind AutoNation. Costco regularly teams up with various automobile manufacturers to offer special deals to customers, e.g., Polaris (a leading seller of powersport vehicles) in 4Q2015 and General Motors from October 2015 through January 2016

 

[MitchJi]

The Chevy Trax, which appears to share the same basic platform family as the Bolt, has a 0-60 time of somewhere around 9 to 10 seconds, while the Bolt itself is spec'd to make the same run in about 7 seconds. That's noticeable. The Bolt will also have a lower center of gravity and better weight distribution. Dynamically it will likely have better characteristics than its ICE counterpart.

For some people the Bolt may very well be appealing as a designated commuter car. Yes, it basically has an expected radius of 100 miles, but that's a hell of a lot better than 40-60 miles in a LEAF. It does give some people a decent safety buffer on top of commuting capacity. No, it will not compete with Model 3, but that doesn't mean it isn't compelling.

Compelling, translation: Strong value for money.

$37,500 for a GM Bolt (or even $30K after $7.5K IRC 30-D US Federal Tax Rebate) for a small low-powered city car competing in a market of $15-$17K ICE options with significantly greater utility.

Not compelling.

Charged EVs | Chevy designed the Bolt with performance in mind (not just range and price)

Chevy designed the Bolt with performance in mind (not just range and price)

In the eyes of the EV media at least, the Chevrolet Bolt EV, scheduled to go on sale later this year, is a historic vehicle. It’s the first to deliver the range and price point that pundits have been saying represent a “tipping point” for EV sales. However, GM designed the Bolt with more than practicality in mind.

“Being the leader in range and affordability means nothing if the car isn’t going to excite you each time you get behind the wheel,” said Josh Tavel, Chevrolet Bolt EV Chief Engineer. “That’s why the team was tasked with delivering a propulsion system that would also make the Bolt EV an electric vehicle that owners would love to drive.”

The Bolt EV’s motor cranks out 266 lb-ft (360 Nm) of torque and 200 hp (150 kW) of power, delivered via a shift-by-wire system that requires less packaging space than a traditional mechanical shifter. The Bolt’s 0-60 time is less than 7 seconds, which won’t frighten the Model S or Mustang in the next lane, but should at least enable you to smoke a Prius (which gets there in around 10 seconds).

Designing any battery system requires tradeoffs between energy (range) and power (performance), but the Bolt’s engineers are confident they struck the right balance.

“You usually have a battery cell that delivers either the desired levels of energy or power, but not both. With this cell design and chemistry we were able to deliver a battery system with 160 kW of peak power and 60 kWh of energy,” said Gregory Smith, Bolt EV Battery Pack Engineering Group Manager.

The Bolt’s 60 kWh battery pack has 288 lithium ion cells and weighs 960 lbs. Like the Volt’s pack, it uses active thermal conditioning to maintain an optimum temperature. A 7.2 kW onboard charger is standard, and CCS DC fast charging system is available as an option. The regenerative braking system allows the driver to choose either one-pedal driving or the more traditional less-aggressive regen.

I think it will be compelling enough to sell very well. Someone at GM, probably Mary Barra has clearly been learning from Tesla. No similar statements when the Volt was announced.

It could be a Leaf killer. But compelling compared to an M3, or more to the point compelling that it might have a negative impact on Tesla M3 sales (Tesla will be production constrained for long time), is IMO a joke.

Check this out! Not surprisingly the MS is #1 but check out 2 and 3:
The Most Satisfying Commuter Cars - Consumer Reports

The Most Satisfying Commuter Cars
The vehicles that subscribers say take the pain out of driving to work


In this year’s Annual Auto Survey, we gathered owner satisfaction data on about 230,000 vehicles less than three years old. One of the things we asked our subscribers was how satisfying their vehicles were for commuting, and to give us specifics about why their vehicle was the ideal commuter car.

The list is presented in rank order, counting down from the most satisfying, the Tesla Model S.
“It is a joy to drive: comfortable, agile, responsive, quiet, and ‘green.’”

“Driver assist and cruise control with tracking are very convenient for routine rush hour stop and go traffic.”

“Auto Pilot 1.0 keeps a safe distance between my car and others; Quiet; Comfortable; Navigation automatically adjusts to the fastest route (huge when the 405 is backed up).”

2) Chevrolet Volt
“Essentially I gave myself a raise. My electric bill increased about $100 overall. However my employer has free charging stations at work, so I no longer pay the cost of commuting home. The HOV sticker took me about 60 seconds to appreciate.”

“Able to complete my daily commute using no gas on most days. The car is much more comfortable than I anticipated. Nice to see an American manufacturer stepping up to the plate with a great EV.”

“My wife uses this car for her daily commute. She can do so easily on battery alone, even on the coldest days. We then recharge overnight in the garage at a fraction of the cost of a gasoline powered vehicle. The car is smooth, comfortable and quiet.

3) Nissan Leaf
“This car is pretty much a perfect commuter car. Plenty of power, comfortable and super quiet. And of course it NEVER NEEDS GAS!!!”
“Perfect commuter car, can use HOV lane, CHEAP to operate, enough range for daily commute and more.”

- - - Updated - - -

Tesla Motors Earnings Scheduled: Black Ice Or Autopilot? | Stock News Stock Market Analysis - IBD

Tesla’s Musk was scheduled to take part in a Hong Kong technology forum Tuesday, Engadget reported, quoting him as saying that the company is “doing reasonably well” in Mainland China. The report also says Musk aims to lock down plans to manufacture vehicles in China, finding a local partner and a place for its plant by midyear.

 

[vgrinshpun]

So Bolt's 60kWh battery pack weighs in at 960lbs, which yields energy density of 62.5 Wh/lb. It appears to be a stressed structural member (floor) of the Bolts 164" long, 69.5" wide body, similar to Model S. The car is projected to go on sale this year.

Model S 90kWh battery pack weighs 1300lbs, which yields energy density of 69.23 Wh/lb, while being structural member of the MS 196" long, 86.2" wide body. The car is on sale since 2015.

So the energy density of the newest offering from GM is 11% lower from the one already offered by Tesla, while underpinning a car 32" shorter and 16.7" narrower. The battery pack for M3, according to JB Straubel, will have at least 10% improvement in cell chemistry and will obviously underpin a 20% smaller than MS car. So M3 battery pack will likely have at least 20% higher energy density than Bolt's pack, while underpinning significantly larger car.

Come on, GM, you got to try harder if you want to do what Tesla bears want you to do - compete with M3.

 

[mrdoubleb]

Has this been posted yet?

Q4 ER on February 10

On my phone now, not gonna search for the link but I received the news alert this morning.

 

[MitchJi]

Break even point is not a point at which capital cost of battery storage is becoming less than that of a peaker plant. The break even point is a point at which estimate for benefits of battery storage are equal to the cost. I suggest that you look at the actual study (available for download without fee here) rather than Mr. Naam digest.

The study that I linked above is titled "Cost-Effectiveness of Energy Storage in California" and is based on the inputs of California Public Utility Commission (CPUC), and therefore is specific to California. This furthers the point that I was making in my original post - that the break-even cost effectiveness point will vary by the region. Hence are the differences between the capital cost threshold of cost effectiveness determined by Brattle study for Texas ($350/kWh) and the one determined by EPRI study for California ($842/kWh).

None of the above provide any information on comparison of the capital cost of battery storage vs. a peaker plant.

Ok, I used your link to download the study and I am a tiny bit annoyed that it was a waste of time. Two relevant quotes below that confirm the quote by Mr. Naam:

Bulk Storage Use Case (Peaker Substitution)
The bulk storage (peaker substitution) use case involves the comparison of energy storage to a gas-fired peaker generation unit. This use case considers energy storage that provides grid services that the peaker generation would have access to, including system capacity, energy sales (time-shift/arbitrage for storage), frequency regulation, spinning reserve, and non-spinning reserve. For this use case, the energy storage systems investigated were all 50 megawatts (MW) or larger in size.

Results of Base Case
Given the inputs shown in the sections above, the resulting stacked bar chart is shown in Figure 4-3. Based on the inputs provided by the CPUC working group, the base case for the bulk storage use case has a benefit-to-cost ratio of 1.17. The storage system generates a large part of its revenue from regulation service. The base case returned a breakeven capital cost of $842/kWh in 2013 real dollars. Breakeven capital cost is defined as the cost of the fully integrated storage system that would yield a benefit-to-cost ratio of 1.0 in the ESVT model.

Next time you accuse someone of spreading false information please be sure you know what you are talking about.

 

[Julian Cox]

What I do not understand is how Tesla will service the Model 3. I have 3 Chevy dealers who are ready, willing and able to service a Volt and I assume a Bolt ,within 25 miles. But the nearest Tesla service center is 250 miles away. When Tesla had a Ranger program or picked your car up that worked well. But now I hear I have to arrange a tow to get my car to a service center at a cost of $725 each way. Throw in taxes and we are talking $1500 for a service call. I do not see that working for a mass market car. Yes Tesla is building out but GM has them beat on the number of service centers about 100 to one.

I think this speaks to an almost universal fallacy. The answer to this question and anything like it is to look at how anything came into being rather than create what is essentially a straw man that x exists making it hard to imagine a time when it didn't and y does not exist making it hard to imagine that it ever will.

This is a doozie when it comes to the oil and gas industry and the ICE auto industry. The truth is that there was a huge flurry of activity that brought these things into existence over very short periods of time, it's just that this time is concentrated somewhere between 120 and 80 years ago and has looked virtually unchanged in nature - until now.

The most remarkable thing about Tesla is not that there is a gap in the market for service centers and charging stations (analogues of dealers and fueling stations) but that it has had the foresight to bring the development of these things into its own capital structure to avoid the mistakes of the past: Setting up a total conflict of interest between the auto maker and profit-motivated third party cost-centers. The gate-keepers to market service and fuel its products.

When Ford started out, it was obvious that there was big bucks to be made off the back of it in Oil mining and refining, in retail sales, in service centers and in taxi services. That's where the capital went and that is where the bulk of the profits were made. As well as Ford did financially since inception, Big Oil and dealers in aggregate and taxi services in aggregate did ridiculously better. In fact it was so obvious was where the big bucks were at that Ford was able to fund its early expansion not by selling shares but by selling sales and service franchises and allegedly by an infusion of capital from Rockefeller. Ford's failed attempts to extricate itself from dealers is why they (and the whole ICE auto industry in the USA) is in an enduring franchised dealer law trap that will kill them now that the world is turning once again to one in which the big money is in selling highly efficient cars with relatively low servicing needs and even more efficient autonomous taxi services.

As a result of bringing manufacturing, sales, service and energy under one capital structure Tesla is positioned to capture the entire value chain related to mobility formerly occupied by all of the above and to do so without a third party seeking to concentrate profits in service or in energy but with the freedom to concentrate profits in the actual provision of value to customers and to drive down costs in sales and marketing processes, service and energy all of which hurt the customer value proposition the more they cost. This is why smart money is interested in concentrating capital in TSLA and frankly why even smarter money right now is interested in the lowest possible entry point because this stuff is going to get rather real before the end of this year.

 

[Julian Cox]

i would not rule out the possibility that TM partners with....God forbid...an ICE manufacturer to service a more mass market midel3. They will not be able to build SCs fast enough to service hundreds of thousands of 3s by 2020.

There is absolutely no way that Tesla would veer off the path of delivering autonomous fleet services, and for that to function, servicing must be done by Tesla. If Musk is a genius at anything, he's a genius in aligning incentive structures to gravitate towards delivering the desired outcome. A bunch of people seeking profits from escalating service costs is a conflict of interest that is unimaginable in that context while raising capital and hiring service staff away from traditional dealers to deliver service centers proportional to need is not.

Regards a possible partnership. I don't think it is necessary or greater than 50% probable. However the one potentially interesting situation right now is that the Apple Titan program has lost its lead man and is rumored to be struggling. Musk's own comment when discussing Apple with the BBC - that he thinks Apple can develop a compelling vehicle but 'it's difficult' may speak to greater access than a mere guess. Apple's acquisition of Beats by Dr. Dre is interesting too. This represents a departure for Apple to go to market with a third party brand. The Tesla brand is tailor made to be sold through something exactly like Apple retail and I would feel certain that 999 out of 1000 Apple shareholders would gladly put up a few 10s of $billions of Apple's under-uitilized war-chest just for the chance to have Musk take an interest in the future of Apple and for Apple to have any piece of the Tesla pie especially if Musk's control and direction of Tesla is undiluted by Apple's management bureaucracy. An example of a deal that could work with Apple is a mega franchised dealership and distribution deal.

Regards Supercharger stations - I struggle to see any problem here. Anywhere along a highway that offers retail of anything would be only too delighted to donate parking-space land in return for a constant guaranteed flow of Tesla Model 3 customers. Many retailers would even bid for the opportunity.

 

[lango]

I agree with Julian here about the long term and how the business align. I read the whole text :wink:

As for dhrivnaks question:
Compared to GM Tesla's current market position is worse when it comes to service proximity and convenience. All else being equal this means less sales for Model 3 and more sales for the competitors. There will be Model 3 customers that will have a PITA experience with service and costs. However, this does not at all offset all other advantages Tesla has compared to the competitors. So while there will be a few customers that will have a bad experience because of growth pain, in the end it does not matter for the success of Model 3.

 

[vgrinshpun]

Break even point is not a point at which capital cost of battery storage is becoming less than that of a peaker plant. The break even point is a point at which estimate for benefits of battery storage are equal to the cost. I suggest that you look at the actual study (available for download without fee here) rather than Mr. Naam digest.

The study that I linked above is titled "Cost-Effectiveness of Energy Storage in California" and is based on the inputs of California Public Utility Commission (CPUC), and therefore is specific to California. This furthers the point that I was making in my original post - that the break-even cost effectiveness point will vary by the region. Hence are the differences between the capital cost threshold of cost effectiveness determined by Brattle study for Texas ($350/kWh) and the one determined by EPRI study for California ($842/kWh).

None of the above provide any information on comparison of the capital cost of battery storage vs. a peaker plant.

Ok, I used your link to download the study and I am a tiny bit annoyed that it was a waste of time. Two relevant quotes below that confirm the quote by Mr. Naam:



Next time you accuse someone of spreading false information please be sure you know what you are talking about.

Please don't put words in my mouth - I did not accuse anybody of anything. Pointing inaccurate information is not the same as "accusing someone of spreading false information".

Engaging in personal attack ("please be sure you know what you are talking about") does not add any value to the discussion and is against the rules of this Forum. I am asking you to refrain from this in future.

The first paragraph you mentioned:

does not indicate that breakeven capital cost arrived to in the study is compared in any form or shape with the cost of the peaker plant. This paragraph, however, indicates that in order to calculate benefits of battery storage the study considered revenue that operating battery storage can bring when used to provide services replicating those of a peaking fossil generator, as explained three pages after the quote included in your post:

Once again, as I posted before, the breakeven point is capital cost of battery storage system at which capital cost plus O&M costs over the assumed life of battery storage system are equal to the revenue from battery storage system providing services that replicate services of a peaker plant. The breakeven point of $842/kWh of battery storage capacity has nothing to do and does not imply any cost comparison with a peaker plant.

 

[Buddyroe]

Something VERY strange is going on with the supercharger network in the U.S. Well, maybe. I believe one of 2 things is going on. The first is that Tesla is trying to post some good numbers this qrtr (16Q1) so they have slowed the build-out. The other is that they are about to announce a major partnership or some other kind of change to the network. Tesla has only started construction on one supercharger in the U.S. in 2016.

Either way, there is SOMETHING going on. And this has massive short term implications.

My first choice is a major partnership with another car manufacturer to use Tesla drive trains and thus the supercharger network (and then sharing in the cost of the supercharger build-out). My next choice would be that they are announcing a partnership with a major gas station brand or fast food brand to install 2 to 4 supercharger stalls at hundreds - if not thousands of locations across America (in a pay-to-use strategy using private labeled chargers). And even better would be if they announced BOTH. But, if it is just the private labeled pay-to-use chargers, that has the potential to draw a major manufacturer to use Tesla technology since there will be greatly dispersed chargers all over America.

I have a hard time believing that Tesla has slowed the build out to save money. As Musk pointed out, the supercharger build-out is such a small part of the CAPEX spending. It would hurt more than help at this point.

Fingers crossed for something incredibly good!

So no one has a clue or even an opinion about what is going on RIGHT NOW with the SupChgr network? For a short term thread, most people want to talk about a car that is due to be released in over 2 years. Even the gov't considers 2 years to be long term.

I personally think the short term is going to be greatly affected by what is brewing in regards to the SupChgr network - though, the reveal and initiation of order taking for the M3 certainly does also, I think people want to ONLY discuss the glamorous topics, and ignore the "in the trenches", less fun to talk about topics. Sort of reminds me of football team forums where everyone wants to talk about the QBs, WRs, and RBs, yet, in reality, it is the offensive and defensive lines that are far more important - but of course, much less fun to talk about!

 

[Gerardf]

So no one has a clue or even an opinion about what is going on RIGHT NOW with the SupChgr network? For a short term thread, most people want to talk about a car that is due to be released in over 2 years. Even the gov't considers 2 years to be long term.

I personally think the short term is going to be greatly affected by what is brewing in regards to the SupChgr network - though, the reveal and initiation of order taking for the M3 certainly does also, I think people want to ONLY discuss the glamorous topics, and ignore the "in the trenches", less fun to talk about topics. Sort of reminds me of football team forums where everyone wants to talk about the QBs, WRs, and RBs, yet, in reality, it is the offensive and defensive lines that are far more important - but of course, much less fun to talk about!

What makes you so sure something special is going on with the SuperChargers ?

Supercharge.info shows 9 new SuperChargers this year, as well as new permits.. Maybe a slower than other month but could be many reasons for that (winter / slower permitting in December / maybe indeed a bit slower to improve the quarter). But nothing dramatic IMHO.

 

[ev-enthusiast]

So no one has a clue or even an opinion about what is going on RIGHT NOW with the SupChgr network? For a short term thread, most people want to talk about a car that is due to be released in over 2 years. Even the gov't considers 2 years to be long term.

I personally think the short term is going to be greatly affected by what is brewing in regards to the SupChgr network - though, the reveal and initiation of order taking for the M3 certainly does also, I think people want to ONLY discuss the glamorous topics, and ignore the "in the trenches", less fun to talk about topics. Sort of reminds me of football team forums where everyone wants to talk about the QBs, WRs, and RBs, yet, in reality, it is the offensive and defensive lines that are far more important - but of course, much less fun to talk about!

People here are as well not interested in talking about issues about FWD hinges with the X. A moderator even made a fun comment about my initiative to discuss this topic here cause I could imagine this is getting relevant for further X ramp and X rework for vehicles already delivered. I realize that I get more information by some friends working in the German automotive industry like Dürr, Eisenmann and others compared to this forum. This thread has nothing more to do with short term TSLA price moves, only chat room for all kinds of opinions about Tesla Motors the company.
All the best,
Happy investing,
EV-E

BTW buddyroe, in case you have any new info about SC rollout plan, please let me know, I am interested.

 

[lango]

So no one has a clue or even an opinion about what is going on RIGHT NOW with the SupChgr network? For a short term thread, most people want to talk about a car that is due to be released in over 2 years. Even the gov't considers 2 years to be long term.

I personally think the short term is going to be greatly affected by what is brewing in regards to the SupChgr network - though, the reveal and initiation of order taking for the M3 certainly does also, I think people want to ONLY discuss the glamorous topics, and ignore the "in the trenches", less fun to talk about topics. Sort of reminds me of football team forums where everyone wants to talk about the QBs, WRs, and RBs, yet, in reality, it is the offensive and defensive lines that are far more important - but of course, much less fun to talk about!

I have never really followed the Supercharger or Service Center build-out. Maybe I should have... I am curious though why you think it will move the stock short term? I can see that being the case if there is a partnership announcement or any other type of business announcement with respect to the Superchargers. But if there isn't I don't think the pace matters all that much for the stock price. I have yet so seen it being discussed on CC, in press or by analysts.

I agree with you about derailing of the topic sometimes. This seems to be as much a general chat thread

 

[chickensevil]

So no one has a clue or even an opinion about what is going on RIGHT NOW with the SupChgr network? For a short term thread, most people want to talk about a car that is due to be released in over 2 years. Even the gov't considers 2 years to be long term.

I personally think the short term is going to be greatly affected by what is brewing in regards to the SupChgr network - though, the reveal and initiation of order taking for the M3 certainly does also, I think people want to ONLY discuss the glamorous topics, and ignore the "in the trenches", less fun to talk about topics. Sort of reminds me of football team forums where everyone wants to talk about the QBs, WRs, and RBs, yet, in reality, it is the offensive and defensive lines that are far more important - but of course, much less fun to talk about!

Even considering costs and them pushing FCF positive, Superchargers are an insignificant cost currently to the overall spending of the company (This is like complaining about NASA's budget being too big when discussing the size of the US government spending). So I wouldn't think that to be a reason.

I also wouldn't see why partnering with anyone would keep them from slowing down. They pretty much have already partnered with a couple chains. Look at Simon Group (or whatever they are called) that owns a large number of malls in the US. At every one of them they have been sticking superchargers. It had been stated last year sometime by the company that the issue is *not* in finding people willing to let them install. In fact they now have almost too many people asking that it is tough for them to sort though. The issues are permitting and other red tape getting in the way of progress. And just because we don't see something under construction or in permit status doesn't mean it isn't there. All of these are found by enthusiasts searching in their local area for locations and paperwork being filed. Many of the locations go on the map once they are completed without ever seeing it go through the other two stages.

So no, I don't see any pause in the supercharger roll-out as suspicious. There were many such pauses last year.

- - - Updated - - -

People here are as well not interested in talking about issues about FWD hinges with the X. A moderator even made a fun comment about my initiative to discuss this topic here cause I could imagine this is getting relevant for further X ramp and X rework for vehicles already delivered. I realize that I get more information by some friends working in the German automotive industry like Dürr, Eisenmann and others compared to this forum. This thread has nothing more to do with short term TSLA price moves, only chat room for all kinds of opinions about Tesla Motors the company.
All the best,
Happy investing,
EV-E

BTW buddyroe, in case you have any new info about SC rollout plan, please let me know, I am interested.

You were responded to on it:
Short-Term TSLA Price Movements - 2016 - Page 203

It is lined with Magnesium to reinforce the roof line to avoid issues. They aren't just made with Aluminum. If you don't think this is a sufficient answer, by all means... I took the information provided as sufficient to put to rest any possible issues. And the Moderator comment was because noone had heard of any issues related to what you were talking about, your initial comment was quite vague (hey I heard there might be an issue with the doors... but maybe not... has anyone else heard anything -- that's how it read to me) so he was asking you for more information because yes, of course that would be a big deal, and noone had heard anything.

So again, do you have anything else to add, because clearly we are all in the dark... You can't just go saying oh, I think there might be an issue with this or that without providing context...

 

[jhm]

I hate to break up this debate on battery peaker plants, but the US Supreme Court has just upheld FERC Order 745. This pretty much renders the capital cost of any peaker facility irrelevant. So gas versus battery peaker is pretty much just an academic exercise.

Order 745 allows retail customers to be compensated for participation in DR (demand response) programs with with compensation equivalent to wholesale prices. Thus whenspot prices exceed retail rates, customers with their own means to cut consumption of grid supplied power (whether through reducing total consumption or consumption net of behind-the-meter assets such as generators, solar, or batteries) may earn spot price level compensation. Keep in mind that commercial and industrial retail customers pay rates lower than residential. Particularly industrial rates are just a few cents higher than wholesale. Thus, tapping the ability of ratepayers to self-consume at times of peak demand for power will directly compete with utility scale peak capacity.

Why does this render capital costs moot? Retail customers invest in their own behind-the-meter energy resources for multiple purposes. If you are a data center that needs extremely high backup reliability, you have justified critical investment in batteries and generators for that purpose. You welcome the opportunity to participate in DR not so that it justifies your capital investment, but merely because it generates incremental revenue to offset a portion of that cost. So the level at which you participate depends on your marginal cost of curtailing grid consumption.Thus, you care about the consumption of cycle life on your battery and the cost of recharging the battery, but you do not care about all the other capital costs of installation.

So through these programs, energy storage will offered to the grid at pretty close to the marginal cost of battries. Utilities will find that the simply need far less stand by capacity, so standby fees to peaker plants will plummet, and the least efficient peaker plants will be retired. So at this point I see little call for new peaker capacity whether natural gas or batteries. The good news for batteries is that Order 745 provides myriad behind-the-meter opportunities for batteries. I believe this will lead to a much more dynamic market for Tesla Energy.

 

[AudubonB]

..A moderator even made a fun comment about my initiative to discuss this topic here cause...

Er....I'm pretty sure I was entered into martyrd....umm, moderatordom...despite my 'fun comments', not because of them....

Carry on!

 

[uselesslogin]

People here are as well not interested in talking about issues about FWD hinges with the X. A moderator even made a fun comment about my initiative to discuss this topic here cause I could imagine this is getting relevant for further X ramp and X rework for vehicles already delivered. I realize that I get more information by some friends working in the German automotive industry like Dürr, Eisenmann and others compared to this forum.

I think you may be forgetting there are only 73 people logged into this forum right now. The chances that someone logged in here actually has direct knowledge of this is extremely low. I would be extremely interested in getting more details on this but I would think people in the automotive industry would know more than the members on this forum here - especially if you are asking for general information like on what issues Tesla would have to work around. I mean there is no harm in asking, but what are we supposed to discuss, exactly?

 

[AudubonB]

...Order 745 allows retail customers to be compensated for participation in DR (demand response) programs with with compensation equivalent to wholesale prices. Thus whenspot prices exceed retail rates, customers with their own means to cut consumption of grid supplied power (whether through reducing total consumption or consumption net of behind-the-meter assets such as generators, solar, or batteries) may earn spot price level compensation...

Jim- in my estimation this Supreme Court decision is of extreme importance both to this forum's topic, Tesla Motors, as well as to Solar City, and I know the conversation there also is very active. I've highlighted two important verbs in your explanation, because the results of the decision depend deeply on the precise wording. Can you vouch that you used the appropriate verbs?